Branding from Cape to Cairo
Absa positions itself as an African bank
The existing Absa brand, designed in the mid-1990s, has been an outstanding success by any measure. The Absa brand is the fourth most valuable in the country, according to the latest Brand Finance survey, with a monetary value of R18.8bn, a shade behind FNB (R19.3bn), Vodacom (R27.4bn) and MTN (R44.2bn). So why change it?
The separation from Barclays necessitated a change, but rather than revert to the pre-existing Absa brand, the group saw an opportunity for a more sweeping reinvention that embraces every aspect of the business, says Bobby Malabie, Absa Group head of marketing & corporate relations.
“The separation from Barclays presented an opportunity to take a long-term view of where we wanted to be in the next few years, so we undertook an extensive consultation process with staff and stakeholders about the type of bank they wanted Absa to be,” says Malabie.
More than 130,000 conversations were had as part of the process over the course of more than a year.
“The Absa brand is instantly recognisable, and was rated by Deloitte as one of the coolest brands in the country earlier. But when we surveyed our customers and staff recently, the feedback we got was that the brand had lost some of its edge,” says David Wingfield, Absa Group marketing head. We have known for some time that we would have to be more digitally-enabled in dealing with customers.”
Not that the group had neglected investment in technology, but banks of the future will be predominantly virtual, and that requires huge investment in online delivery, security and brand promotion.
One of the challenges facing the group is converting more than 400 Barclays branches in Africa to Absa, while retaining the goodwill of the Barclays brand built up over the past century. “Many of Barclays’ African customers are already familiar with the Absa brand, but for those who aren’t, we have started an educational programme to familiarise them with the changes that are coming, and putting their minds at rest. We still have the same balance sheet and the same level of service they are already used to,” says Wingfield.
Absa will henceforth be seen as an African bank, rather than an SA bank with some branches scattered across the continent, says Malabie.
The logistical challenge of reimaging the Absa brand is daunting: apart from replacing physical signage and logos across the group, 48,000 artefacts (such as contracts and bank forms) are in the process of being changed to reflect the new brand.
This does not include re-imaging major sports events for which Absa is the prime sponsor, such as the Absa Premiership, the English Premier League in Africa, the Barclays Kenya Golf Open and the Barclays Cup in Zambia.
Absa received R12.1bn from Barclays Plc for separation projects including rebranding as well as replacing technology and other services provided by Plc. This is arguably a record for such an exercise in SA. Absa and its shareholders will want to see a respectable return on this investment.
Much of this will be spent on technological improvements. “In retail banking, it is simple to determine what people want, but complex to deliver it,” says Wingfield. “Customers want to be able to transact, store money, borrow, grow their wealth and get advice. Price and ease of use are the big drivers of this market. In the near future, most of these services will be available digitally.”
The corporate market is more complicated, but here too, digital delivery of increasingly sophisticated products will be crucial to retaining and growing market share.
The Wealth, Investment Management & Insurance (WIMI) business will likewise migrate most of its services to digital platforms, supplemented by new products and services calculated to give it an edge over their competition.
This investment in technology, apart from reducing the cost of delivering products and services, will create a simpler and more organic banking experience for clients.
Wingfield says clients will in future no longer need to enter a branch to open an account or transact with the bank. A digital image of the client’s face can be cross-checked against a national database and automatically checked for compliance with FICA, a process that could take minutes instead of the current delay of hours or even days.
It’s only in recent times that brand valuation has been subjected to scientific analysis. A formidable team was assembled for the rebranding exercise: Ogilvy Red (brand valuation); Yellowwood (brand strategy); Grid (brand design); FCB Africa and Mortimer Harvey (advertising agencies); and Carat (media buying).
“Brands and reputational issues have never been more important as has been seen so clearly in SA over the past year,” says Jeremy Sampson, executive director of Brand Finance Africa.
“Whether it be the nefarious activities of the Gupta family and their acolytes, which affected such companies as Bell Pottinger,
Eskom, Mckinsey and KPMG, or the problems experienced by Steinhoff and Tiger Brands. Companies, individuals and even countries can be caught up in these issues.”
The purpose of a strong brand is to attract customers, build loyalty and motivate staff. Above all this, however, brands must make money, says David Haigh, CEO of Brand Finance.
Brand values are calculated by estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use.
Put another way, brand value is the net economic benefit that a licenser would achieve by licensing the brand in the open market.